Module Code: ABZ2019AC116

Module Title: Introduction to Demand and Supply Curves

Delivered By: Ting F.M., Chris R., Lakshmi N., and Lynn A.

Session Number: Session-5, Monday, July 01, 2019

Design Tools for Demand and Supply Curves-PART I

The demand curve of a commodity is the relationship between the price and the quantity demanded. Similarly, the supply curve of a commodity is the relationship between the price and the quantity supplied. The intersection point of the demand and the supply curves of the commodity is the equilibrium price. The quantity associated with the equilibrium price is the equilibrium quantity. If the market price of a commodity is less than the equilibrium price, a shortage occurs(see the curves). In other words, when the market price is less than the equilibrium price, the quantity supplied becomes insufficient to meet the quantity demanded. On the other hand, if the market price of a commodity is greater than the equilibrium price, a surplus occurs(see the curves). When the market price is greater than the equilibrium price, the quantity demanded becomes insufficient to meet the quantity supplied. Therefore, considering the complexity associated in the computation of demand and supply curves of a commodity, equilibrium point, and shortage and surplus quantities, a few design tools are presented below.

iDemand Version 1.0

iDemand Version 1.0 fits the demand curve of a commodity. The tool requires two end points of the demand curve. The quantity demanded and the associated commodity price are the coordinates of the points. The market price of the commodity that falls between the given end points is used to range the demand curve. The current version of the tool prompts the invalid user inputs.

LEARN/TEST

iSupply Version 1.0

iSupply Version 1.0 fits the supply curve of a commodity. The tool requires two end points of the supply curve. The quantity supplied and the associated commodity price are the coordinates of the points. The market price of the commodity that falls between the given end points is used to range the supply curve. The current version of the tool prompts the invalid user inputs.

LEARN/TEST

iEquilibrium Version 1.0

iEquilibrium Version 1.0 determines the equilibrium point (i.e., equilibrium quantity and equilibrium price) of a commodity, given the demand curve, supply curve, and the market price of the commodity. The curves are defined by specifying the end points of the curves. The quantity demanded/supplied and the associated commodity price are the coordinates of the points.

LEARN/TEST

iSurplus Version 1.0

iSurplus Version 1.0 determines the surplus quantity of a commodity at a given market price. The tool plots the graph of surplus quantity versus the market price. The demand curve, supply curve, and the market price of the commodity are the inputs to the tool. The curves are defined by specifying the end points of the curves. The quantity demanded/supplied and the associated commodity price are the coordinates of the points.

LEARN/TEST

iShortage Version 1.0

iShortage Version 1.0 determines the shortage quantity of a commodity at a given market price. A shortage occurs when the market price of the commodity falls below the equilibrium price of the commodity. The tool plots the graph of shortage quantity versus the market price. The demand curve, supply curve, and the market price of the commodity are the inputs to the tool. The curves are defined by specifying the end points of the curves. The quantity demanded/supplied and the associated commodity price are the coordinates of the points.

LEARN/TEST

You have reached the end of today's session.

Good luck! Hope you enjoy.